What Budget 2015 means to you

Last Tuesday, the Minister for Finance, Michael Noonan, delivered his Budget speech. It wasn’t that an exciting a Budget. Today I have a look at Budget 2015 and what it means to you.


The Pensions Levy

This is one I have been really keeping my eye on. The Minister said that he will abolish the Pension Levy from 2015. This was supposed to only be in place for 4 years at a rate of 0.6% of the pension fund value. It was increased to 0.75% for 2014 and will be collected at a reduced rate of 0.15% in 2015. After going back on his promise to stop it after 4 years, let’s wait an see if it is indeed stopped next year.

The Pension Levy is collected on 30 June 2015, so if mature your pension plan before then, you can avoid having to pay the levy for 2015.

DIRT Refund for First Time Buyers

First time buyers can claim a refund on the DIRT paid on interest earned in the two years prior to buying a house. It is limited, based on interest earned on 20% of the deposit amount.

For a house worth €300,000, they can claim relief on €60,000 in savings. With an interest rate of 1.5%, that means they will get a refund of €369 on €60,000 savings. It is hardly going to make a difference in helping people buy their first home.

There was no such provision made on other savings plans, such as investments with insurance companies which also has a tax rate of 41%. I have been told that the government will be lobbied on this to give them the same break as deposit accounts.

Income Tax

From 1 January 2015, the 20% income tax band is increased by €1,000 to €33,800 for a single person or €42,800 for a married couple with one income. In the UK, you have to earn €40,000 before hitting the higher tax rate, so we still have a way to go on this.

The higher tax rate has been reduced from 41% to 40% from 2015.


The USC is a simple tax in that you can’t reduce the tax through allowances or pension contributions. With all the different tiers, it is impossible to remember the rates for different level of incomes. In the Budget, there were some minor changes were made at the bottom of the USC table and bigger changes at the top.

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What does this mean for me?

Overall, you will get about an extra €500 – €700 extra next year. I have provided a few comparisons showing the difference in earnings for a single, self employed person.

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Overall, it will mean very little to most people but it is the first year out of austerity, so we could not expect too much.

If you have any questions, please contact me directly at steven@bluewaterfp.ie